Ohio

Commerce Clause Challenge to Wind Farm Siting Approval
In the Matter of the Application of Champaign Wind LLC for a Certificate to Construct a Wind Powered Electric Generating Facility in Champaign County, Ohio, Case 2013-1874 before the Supreme Court of Ohio
Recent Developments: In June 2014, the Governor signed a bill that froze the State’s RPS for two years and permanently removed the requirement for in-State renewable energy. In April 2016, the Supreme Court of Ohio concluded that it did not have to decide whether the repealed in-state mandate was unconstitutional.Case Documents

Case Summary
In 2008, Ohio enacted an Alternative Energy Portfolio Standard (AEPS) that required utilities to procure at least half of their renewable energy requirement from generators located in Ohio. If a utility fails to procure sufficient renewable energy, it must pay penalties into a State-administered fund.

To build any electric generation facility in Ohio, including one that uses renewable energy, a developer must obtain approval of the state’s Power Siting Board. The Board may not approve a project unless it finds that “the facility will serve the public interest, convenience, and necessity.”

In 2012, a developer filed an application to erect up to 56 wind turbines. In its decision approving the application, the Board noted that an Ohio utility could purchase energy from the facility to meet its obligations under the state’s AEPS and said that “this potential benefit of the project adds support to a finding that the proposed project is in the public interest, convenience, and necessity.”

UNU sought rehearing of the Board’s decision, arguing that Ohio’s AEPS cannot be a basis for a finding of public interest, necessity and convenience because the statute’s requirement that renewable energy be generated in Ohio is prohibited by the Commerce Clause. In addition, the statute’s penalty payments are disbursed by the State in a geographically discriminatory manner. According to UNU, the penalty amounts to an unconstitutional in-state subsidy.

The Board affirmed its approval and declined to rule on the Constitutional arguments. The County and UNU appealed the board’s decision to the Supreme Court of Ohio. In its opening brief, UNU reiterated its Commerce Clause challenges and made several other unrelated State law claims.

Intervening Environmental Organizations defended the AEPS’ in-state preference on three grounds. First, they argue that developing renewable energy in Ohio reduces local pollution, achieves a more diverse energy mix, enhances grid reliability, and creates jobs. These are legitimate goals wholly distinct from economic protectionism. Second, Intervenors claim that the U.S. Supreme Court’s view of the dormant Commerce Clause has shifted, and its recent decisions allow States to exercise more authority to address health and safety issues. Third, the AEPS currently regulates only one percent of the State’s electricity, which is not substantial enough to raise Constitutional concerns. Finally, Intervenors warn that if the Court strikes down the AEPS’ in-state requirement, it will open the door to challenges to Ohio’s policies that benefit in-state coal resources.

In April 2016, the Supreme Court of Ohio affirmed the Board’s order. The Court concluded that UNU’s dormant Commerce Clause claim “rests on [the] inaccurate premise” that the in-state mandate was the “only basis” for the Board’s determination that the proposed project was in the public interest. The Court pointed to the Board’s findings of the project’s other benefits and therefore found it “not necessary” to rule on the constitutional argument.